Teesta Distributors Vs UoI

GST - The petitioner claims to sell lottery tickets in the State of West Bengal - The present petition was filed seeking exemption on lotteries, by virtue of Sr No 6 of Schedule III r/w Section 72 of the CGST Act 2017 as well as Sr No 6 of Schedule III r/w Section 72 of the SGST Act.

Held - The definition of goods under Article 366(12) of the Constitution is an inclusive definition & has a wide sweep including all materials, commodities & articles - The definition is not limited to tangible materials, commodities & articles - An intangible product such as software would come within the scope of 'goods' under Article 366(12) - The Apex Court in H. Anraj v. Government of Tamil Nadu held that lottery tickets were 'goods' as per the Tamil Nadu General Sales Tax Act 1954 & the Bengal Finance (Sales Tax) Act 1941, to the extent they comprised the entitlement to participate in the draw - It also held that trade of lottery tickets conferred two rights upon the purchaser, namely right to participate in the draw & right to claim prize if successful - Also considering the decision of the Apex Court in Sunrise Associates v. Government of NCT of Delhi it is seen that a lottery is an 'actionable claim' and constitutes goods or moveable property - Also, it has not been substantiated that the State Govt promulgating the WBGST Act was not competent to pass the law or that it violates any fundamental right or other Constitutionally-guaranteed right - Definition of 'goods' under Article 366(12) permits State Govts to classify lottery & 'goods' & tax it - Schedule III u/s 7 of CGST Act deals with activities which neither classify as supply of goods nor supply of service - Entry 6 in the Schedule excludes actionable claims other than lottery, betting & gambling from the scope of CGST Act - As lotteries generally classify as 'goods' & have been kept outside purview of 'actionable claims' which do not attract GST, lotteries consequently are taxable under CGST Act - Concurrently, they are also taxable under the WBGST Act - The petitioner also challenged the rates imposed by the GST Council - This is an issue which a writ court cannot easily examine - It may be noted that the rates of tax had been fixed by the GST Council after extensive deliberation involving representatives from the States - Hence it is within the domain of the Council to adjudicate rates of tax - Hence the differential levy of tax is permissible - Thus no relief can be granted in the present case: HC (Para 1, 23-36)

- Writ petitions dismissed: CALCUTTA HIGH COURT

SERVICE TAX

2018-TIOL-3166-CESTAT-MAD

ST - The assessee is engaged in stock broking as well as Portfolio Management Services - It is registered under "Stock Broking Services" and "Banking and Other Financial Services" - During the period of dispute, the Department noted that the assessee collected turnover charges or transaction charges @ 0.0035% / 0.0025% of total value of transaction which amount was paid to the stock exchange - Also that assessee availed alleged ineligible credit of service tax paid on employees insurance, food charges and travelling expenses which are not used in providing the output services - Also noted that the assessee availed credit on debit notes issued by an associate company which shared common expenses - Duty demands were raised with interest & imposition of penalties - On appeal, the demands were set aside by the Commr.(A).

Held - Considering the decisions laid down in several cases, transaction charges cannot form part of the taxable value - Regarding availment of credit on employees insurance, food charges and travelling expenses, the demands are set aside as the services were rendered before the scope of 'input service' was narrowed down to exclude these services - However, considering decision in CCE Jaipur Vs Bharti Hexacom Ltd. cenvat credit can be availed on debit notes - Hence the O-i-A warrants no intervention: CESTAT (Para 1,5.1-6)

- Revenue's appeal dismissed: CHENNAI CESTAT

2018-TIOL-3165-CESTAT-AHM

ST - The assessee is engaged as a distributor for M/s Amway India Enterprise Pvt. Ltd. and receives commission for services rendered - The Department sought to levy service tax on the amount so received.

Held - An identical issue was covered by the Tribunal in Charanjeet Singh Khanuja Vs. CST, Indore/ Lucknow/ Jaipur/ Ludhiyana wherein the assessee providing similar services was treated as a 'commercial concern' and was sought to be taxed under category of 'Business Auxiliary Service' - However, the matter was remanded to determine the assessee's eligibility for exemption under Notfn No 6/05-ST - Hence the present matter is remanded back to the adjudicating authorities for conducting similar enquiries: CESTAT (Para 1,4)

- Case remanded: AHMEDABAD CESTAT

CENTRAL EXCISE

F.NO.390/Misc/116/2017-JC

Deadline for completion of activity of Filing/Withdrawal of Departmental appeals in various appellate FORA identified under Instruction dt 11.07.2018 from F.No 390/Misc/116/2017-JC

2018-TIOL-3168-CESTAT-ALL

CX - The first appellant is a partnership firm engaged in manufacturing Angles & rectangular bars using MS Ingots as inputs - It received such inputs from traders & manufacturers and availed Cenvat credit on it - One such supplier is the second appellant, which purchased such goods from different parties and sold the same to different parties such as the first appellant - The Department received an intelligence tip off stating that the first and second appellants had availed improper credit - Search at the first appellant's premises revealed shortage of finished product - It appeared to the Revenue that both appellants had colluded to procure ingots under the garb of fake duty paying documents of dubious trading firms - Also that the first appellant knew that the invoices issued by three firms from which the second appellant had obtained inputs, were fake - It was also alleged that both appellants made no attempt to verify if the goods had been cleared on payment of duty - Hence the Revenue alleged contravention of Rules 7(2) & 7(4) of the CCR 2002 r/w Rules 9(3) & 9(5) of CCR 2004 by not taking adequate steps tp ensure that the inputs on which credit is availed are goods on which requisite appropriate Excise duty is paid - It was alleged that the first appellant failed in ascertaining the antecedents of the suppliers - Duty demand was raised with interest & penalty - Such levies were confirmed by the Commr.(A).

Held - The Revenue does not contest that the first appellant did receive the inputs - Only the invoices accompanying the inputs & cenvat shown appear to be doubtful or fraudulent - The first appellant has shown use of road permits to evidence the transporation of the goods - Such road permits are pre-authenticated documents issued by the Trade Tax Department & the appellant must keep proper records of their usage - The first appellant was also able to produce a road permit issued by the second appellant to its own suppliers for transport of MS Ingots - The appellants were also able to produce proof of payment for such MS Ingots which was made by cheque - Hence the appeals of the first appellant are allowed - Since the second appellant has been involved in fraudulent activities of passing on illegitimate credit in collusion with three firms, the second appellant's appeals are dismissed & the duty demands & penalties are sustained: CESTAT (Para 1,3,4,8,10,15)

- Appeals partly allowed: ALLAHABAD CESTAT

2018-TIOL-3167-CESTAT-ALL

CX - The assessee company is engaged in manufacturing MS Ingots & MS Bars - Its premises were searched as were the residence & office premises of its proprietor & the premises of two buyers who purchased goods from the assessee - The Department noted there to be shortages of MS Ingots during stock taking - Duty demands were raised for alleged on this account, as well as for alleged clandestine removal of goods to one of the buyers without any invoice being raised - The Department based such findings on documents, laptops & hard drives taken during search proceedings - The Department further alleged that the assessee had under-valued goods sold to one of the buyers and had evaded Excise duty in the process - Further short payment of duty was also alleged - Further demand was raised for alleged manufacture & clandestine clearance of MS Bars - Penalty was imposed on the assessee-company u/s 11AC - Personal penalties were imposed on the assessee firm's proprietor & on the proprietors of the other two firms u/r 26 of the CER 2002 - Later, the Adjudicating authority dropped part of the demand raised - Hence the present appeals were filed by both the assessee as well as the Revenue.

Held - The assessee's submitted that the demands were based on loose land-written & printed documents which are completely unrelated to each other - Besides, such papers were not found from the assessee's factory - The Revenue also omitted to prove authenticity of such papers & failed to trace their author - The information was not retrieved from electronic devices maintained by the assessee - The assessee was also denied opportunity to cross-examine the person from whom such evidence was found & so any evidence produced by him is unreliable - In Kuber Tobacco vs. CCE it was held that loose documents are inadmissble as evidence if their author is not available for cross-examination & if such documents were not found in the assessee's premises - Besides, the demand raised in respect of undervaluation was dropped - The assessees' contentions hold weight & so the demands against the assessee be set aside: CESTAT (Para 3,4,6)

- Assessee's appeals allowed: ALLAHABAD CESTAT

CUSTOMS

NOTIFICATION

ctariffadd18_054

Seeks to impose definitive anti-dumping duty on the imports of 'Straight Length Bars and Rods of Alloy Steel' originating in or exported from China PR

ctariffadd18_053

Seeks to levy definitive anti dumping duty on Flax yarn below 70 lea count imported from China PR

Procedure to be followed in cases of manufacturing or other operations undertaken in bonded warehouses under section 65 of the Customs Act

CASE LAWS

2018-TIOL-3164-CESTAT-DEL

Rohit Sakhuja and Jagjeet Impex Vs CC

Cus - The assessee company is engaged in importing ACs, LED panels, LED TVs, packing material & other electronic goods - The Department received an intelligence tip-off that the assessee mis-declared 1.5 ton AC as being of 1 ton cooling capacity - On examination of goods, discrepancies were found in the weight and dimensions of the ACs - The premises of the company were found to be non-existent and the business of importing, selling of imported goods and other activities were found to be controlled by the co-noticee whereas the proprietor of the firm was someone else - The Department alleged that the assessee conspired to make fraudulent import with mala fide intent to evade payment of duty by suppressing material facts - Hence the Department claimed that such goods were liable for confiscation u/s 111(m) of the Customs Act and that the assessee contravened the provisions of Sections 14 & 46 & Section 7 of the Foreign Trade (Development and Regulation) Act, 1992 - Penalties were imposed u/s 112A & 112B, 114A & 114AA of the Act - Such demands were confirmed by the Commr.(A).

Held - The assessee made payment against the Bill of Entry even before issue of SCN - Interest & penalty were paid subsequently - The TR-6 & GAR-7 challans are attached - Such payment was known to the Department & was acknowledged - Hence the SCN was incorrectly issued - The value of ceased goods was erroneously determined despite payment of duty with interest & penalty - In such case the beneficial provisions of Section 28(5) & 28(6) are applicable - The Department adopted an artificial interpretation of law to deny such benefit to the assessee - Legislative intent extending certain beneficial provision to the assessee should not be made frivolous by interpreting it in a particular manner other than the one which reflects upon such intent - Hence the orders in challenge are set aside & the assessee is entitled to receive benefits u/s 28 having satisfied the requisite conditions: CESTAT (Para 1,8,9)

- Appeals allowed: DELHI CESTAT

2018-TIOL-3163-CESTAT-BANG

Cus - The assessee company had imported televisions sets - However the Department confiscated the same and also enhanced their value - When the assessee initially approached the Tribunal, both the confiscation as well as enhancement of value were set aside - Confiscation of some of the TV sets was upheld - However, the assessee claimed that the Department was insisting upon payment of bond and execution of bank guarantee for releasing the goods - Moreover, the Revenue's appeal seeking imposition of penalty on the assessee, had been set aside.

Held - Regarding Samsung brand TV, although confiscation was upheld, the Tribunal also directed their re-export on payment of redemption fine - Regarding the Sony brand TVs, both confiscation & enhancement of value were set aside - Hence the Sony TVs be released unconditionally while Samsung TVs be released on payment of redemption fine - There is no statutory provision to ask for the duty bond or bank guarantee when goods are neither under seizure not under confiscation - Also merely because the Revenue is contemplating filing appeal against such order of Tribunal, it does not mean that such order will be stayed - Hence the goods be released as directed by the Tribunal: CESTAT (Para 2,5-9)

- Appeals allowed: BANGALORE CESTAT